Silver Rates In India To Rise Ahead? All About Imports Restriction On Silver Trade & Its Impact

After hiking customs duty on precious metals and revising the duty-free limit for gold, the Indian government has now tightened the rules for silver trade. India has placed imports of silver bars and all other semi-manufactured forms of silver under the restriction category. Traders now expect this development to trigger price hikes in silver in India. The main reason behind curbing imports of silver is to reduce the overall burden of imports in India, which has taken a major hit due to the West Asia crisis, a strong dollar and a record low rupee.

Silver Imports Restrictions

The government has placed the import of silver bars of 99.9% purity and all other semi-manufactured forms of silver under the restriction category with effect from May 16, 2026. Last year, these two silver categories accounted for 90% of India's total silver imports.

The decision comes after the government hiked the custom duty on gold and silver to 15% from an earlier 6%.

As per trade ministry data, in financial year 2025-26, India spent a record $12 billion on silver imports, compared to $4.8 billion in 2024-25 fiscal. In April 2026, silver imports recorded 157% jump compared to $411 million trade in the same month last year.

India imports silver majorly from markets like the UAE, Britain and China.

How Will Silver Import Restrictions Impact Silver Trade?

As per Jateen Trivedi, VP Research Analyst-Commodity and Currency, LKP Securities, the silver import restriction doesn't mean India has shut the door, it means the entry is now guarded.

"Supply isn't stopping, it's being channeled only through nominated agencies like RBI banks, DGFT-approved entities, jewellers via the bullion exchange," Trivedi added.

For the domestic market, Trivedi said, that it almost always translates into higher premiums.

He stated that the MCX-LBMA spread is the number to watch, because that gap shows you exactly how much extra Indians are paying versus the world price.

Will Imports Restriction Push Silver Prices Higher In India?

In the international market, the import restrictions will not impact. Hence, spot silver price is expected to be muted.

Adding Trivedi said, " India is a large consumer but not a price setter for global benchmarks. What could shift is physical trade flow. If demand gets rerouted through routes like the UAE CEPA TRQ, you'll see regional premiums in Dubai or Hong Kong adjust. Listed refiners and ETF pricing in India will also reflect the tightness, because they become the easiest access point when physical supply is gated."

But the real story as per Trivedi isn't silver. He said two policy moves in three days point to forex management. Restricting silver imports eases immediate dollar outflow and reduces pressure on reserves.

"So while consumers will see higher domestic prices and wider spreads, the bigger play is about protecting the external account. Silver is just the instrument, forex is the driver," Trivedi lastly added.

Silver Rates In India

As of now, 1Kg silver price in India stood at Rs 2.80 lakh, while 100 grams and 10 grams silver rates are at Rs 28,000 and Rs 2,800 respectively. 1 gram silver price stood at Rs 280.

In May month so far, silver price has surged by nearly 10%, after falling by 2% in April 2026. In March, silver price dropped by 15-16% due to the US-Israel-Iran war.

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